It’s … good news, I guess, that Bill Clinton is not involved with Trump University. But this is just the latest example of the land mines Clinton has been planting in his wife’s path for the presidency, should she indeed decide to run. As the [NY] Times reported in a major investigation, there are a lot of questions and there is not a lot of transparency about how the Clinton Global Initiative operates. And that’s the nonprofit Clinton arm of Bill Clinton’s post-presidency. His other business dealings have been profuse and often murky, and every single one of them is going to be investigated by the press if a Hillary Clinton campaign goes forward. The Bloomberg piece [on Clinton’s heading up a for-profit ed venture] does not find any illegality in this instance, but the sleaze factor is considerable. Clinton serving as the “Honorary Chancellor” of a diploma mill that rips off young people — and doing it in a financial partnership that includes the hedge-fund titan Steve Cohen, whose SAC Capital Advisors is ground zero for insider-trading criminality — does not pass the smell test.
Trump, Laureate, and Brown University’s highest-profile trustee, Steve Cohen. The story of today’s university, all in one short paragraph.
As the New York attorney general’s suit against Trump University proceeds, University Diaries revisits the history of this storied campus.
[T]he New York State Department of Education sent letters to both Trump and [an associate] notifying them that Trump University was in violation of state law by calling itself a “university” when “it was not chartered as such” and because it had not been properly “licensed” by the state.
… Trump University could avoid the “licensure” provision of the state law if it were to re-incorporate outside of New York State and if it ran no physical seminars in the state. But “Trump University failed to abide by any of these conditions,” the attorney general wrote.
[Eric] Schneiderman claims the “university” continued to use 40 Wall Street … as its principal corporate address, including in numerous advertisements. It furthermore conducted “at least fifty live programs in New York between 2006 and 2011.” Schneiderman noted that “Trump University LLC” was finally renamed, on May 20, 2010, “The Trump Entrepreneur Initiative LLC.”
In his deposition [a Trump associate] admitted that the failure to comply with the stipulations was “an oversight” and something he and Trump “forgot” about.
West Virginia’s national image is shaped more by [West Virginia University’s] football program than anything else. One of my long-time traditions is to take an annual vacation in Las Vegas. For years, if I wore a West Virginia hat or other garb, I’d be greeted with “You guys are good” … During a recent trip, the comments were a virtually unanimous: “You guys are no good.”
There’s no retort to that. They’re right.
… If UD can alter that song a bit… Not that it’s surprising, in a new news sort of way, that Yeshiva’s current president long knew and did nothing about sex abuse allegations at that university’s high school.
[I]nternal documents obtained by the [Jewish Daily] Forward indicate that, in fact, [Richard] Joel, who arrived at Y.U. in 2003, was told both before and after he became president about allegations against Rabbi George Finkelstein, the former principal of a Y.U. high school — and that he declined to intervene in the first instance or respond in the second… “I spoke with [a former student making a charge against the school’s principal] a bit,” Joel explained in a 2004 email to a colleague, describing a complaint … made to him years before he took up his post at Y.U. “[I] told him to get on with his life, that I didn’t see a case and that Finkelstein was out of the education business.”
Sensitive, huh?
Well, Yeshiva will also soon be out of the education business.
“Narrow” is an adjective the academy should not shun but embrace, for if academic activity cannot be narrowly defined, it loses its shape and becomes indistinguishable from political rallies and partisan exhortation. This of course is what the [Israel] boycotters want. [Extremely broad definitions] do not enhance the academic enterprise or add a heroic gloss to the concept of academic freedom; rather they destroy both by emptying them of any specific content.
From William Galston’s review of Tyler Cowen’s book, Average Is Over:
There’s nothing we can do, says Mr. Cowen, to avert a future in which 10% to 15% of Americans enjoy fantastically wealthy and interesting lives while the rest slog along without hope of a better life, tranquilized by free Internet and canned beans.
Bread and circuses is not the policy of a republic, but rather of an empire entering moral senescence. Nonetheless, Mr. Cowen seems untroubled by his hyperpolarized vision.
The kindest description of his stance is moral indifference: “It will become increasingly common to invoke ‘meritocracy’ as a response to income equality,” he writes, “and whether you call it an explanation, a justification, or an excuse is up to you.” While allowing that some might consider extreme socioeconomic inequality unjust, he revives the neoconservative canard that relatively well-off academics lead the charge against such inequality because they envy the status privileges of the wealthy. He seems not to have considered the possibility that his depiction of our future might fill them with justified revulsion.
Over the course of writing this blog about universities and professors, UD has encountered the neoconservative canard about envious academics again and again. A few years ago, Jonathan Chait gathered a few of many examples in a Los Angeles Times column titled Envy Them? No. Tax Them? Oh Yeah. Greg Mankiw, Chait noted, thinks that academics concerned about staggering personal wealth in the context of rising inequality are simply caught up in “the politics of envy.”
What’s depressing is that even highly credentialed conservatives such as Mankiw equate any discussion of class inequality with “envy” of the rich. The accusation is actually bizarre. Liberals want to make the rich pay higher tax rates not because they hate them. (In fact, as conservatives love to point out in other contexts, many liberals are rich.) It’s because somebody has to pay for the government, and the rich can more easily bear higher rates.
Paul Krugman echoes Chait.
To show concern over the growing inequality is to engage in the “politics of envy.”
But the real reasons to worry about the explosion of inequality since the 1970’s have nothing to do with envy. The fact is that working families aren’t sharing in the economy’s growth, and face growing economic insecurity. And there’s good reason to believe that a society in which most people can reasonably be considered middle class is a better society – and more likely to be a functioning democracy – than one in which there are great extremes of wealth and poverty.
Reversing the rise in inequality and economic insecurity won’t be easy: the middle-class society we have lost emerged only after the country was shaken by depression and war. But we can make a start by calling attention to the politicians who systematically make things worse in catering to their contributors. Never mind that straw man, the politics of envy. Let’s try to do something about the politics of greed.
Krugman and Chait were writing in 2005. That Cowen can happily continue the canard suggests that it will be very difficult to kill. You can call it a canard; you can call it bizarre; you can call it a straw man. It will keep coming at you.
What UD has tried to do in some of her writing here is, as Krugman suggests, look in a different direction: the politics of greed. She has been intrigued by this statement from Robert Hughes about the art market:
[T]he present commercialisation of the art world, at its top end, is a cultural obscenity. When you have the super-rich paying $104m for an immature Rose Period Picasso – close to the GNP of some Caribbean or African states – something is very rotten. Such gestures do no honour to art: they debase it by making the desire for it pathological.
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A certain amount of envy toward the rich is normal. It is to be expected. Indeed, that envy can be an engine, a motivator, a thing that helps our economy of entrepreneurs hum along. The politics of envy crowd, however, wants to scare us into believing that this emotion is becoming pathological, even violent, a threat to the republic. Lawrence Kudlow writes that the envious are really saying
“How dare they be successful earners and investors… Should we go out and shoot [the super-rich] for their success?”
Eric Cantor also seems to have in mind French revolutionaries using envy of the rich to trigger civil war:
There are politicians and others who want to demonize people that have earned success in certain sectors of our society. They claim that these people have now made enough, and haven’t paid their fair share. But, pitting Americans against one another tends to deflate the aspirational spirit of our people and fade the American dream.
I believe, with Galston and Krugman, that the greater menace lies in the “moral senescence” of a country of “great extremes.” Senescence, not riots. As Robert Reich remarks, “If you give up on democracy, you are basically saying to the moneyed interests, the powerful people and institutions of society Take it all… Then we are a hundred percent plutocracy.” This is why, on the subject of universities, I dwell on obscene endowments and the universities who pay each of their money managers $35 million a year to make their endowments grow toward… what? They are already in the tens of billions. The hundreds of billions? It’s why I talk about universities who honor trustees like Steven Cohen, a man with a personal fortune of nine billion dollars, and a man in constant trouble with the SEC.
… fewer than ten thousand students that concentrates the mind. The town of Princeton seems sort of amazed, in an ongoing way, about its university’s remarkable tax exempt wealth, and it’s clearly on a campaign to chip away at it.
The latest thing is that a judge has refused Princeton University’s request to throw out a case against it brought by residents and the town in which they claim that a number of buildings on campus should not be tax exempt since they’re non-educational.
Another, broader, charge in the case argues that
the University is not qualified for the tax exemption because it in fact makes money and distributes profits, especially proceeds from patents registered by the University.
Princeton is now lawyering up to defend its exemptions.
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Princeton’s got the same problem Harvard (well on its way to a forty billion dollar endowment) does; maybe their lawyers can work together. As one observer points out:
Viewed purely in terms of economics, Harvard is really a $40 billion tax-free hedge fund with a very large marketing and PR arm called Harvard University that has the job of raising the investment capital and protecting the fund’s preferential tax treatment.
The trick is that this hedge fund can’t remit earnings to investors, and has to keep them in the company’s account, renaming these retained earnings as an “endowment”. So how do the insiders extract value from this business? One way is by giving themselves cushy jobs that pay a ton of dough. Those who manage Harvard’s money are well-paid. The prior investment head, Jack Meyer, left after criticism of a compensation plan that paid some investment management professionals more than $35 million each in a single year...
When tax-advantaged non-profits start to accumulate billions of dollars of cash through investment gains, and the insiders seem to be doing very well, it creates legitimate pressure for some legal changes. There is a broad range of alternatives: capital gains taxes on investment income, directly taxing the endowment, placing limitations on employee compensation, and forcing the distribution of a fixed percentage of the endowment are all obvious choices. Sanctimonious talk about “the mission of the university” is not likely to stop this …
Actually, I think sanctimonious talk, done well, can probably hold the line for a school. UD has always privately felt that the switchover from Lawrence Summers to Drew Faust as Harvard’s president had in part to do with the, uh, incompatibility of Summers and sanctimony.
… you will recall, threatened to sue Harper’s Magazine over an article about the university’s notorious budget problems. Cooler heads – i.e., students – prevailed, and the suit (Joshua Reinharz darkly suggested that “that the article’s author, Christopher R. Beha, was motivated to write an article casting Brandeis’ finances in a negative light because his aunt Ann Beha’s architectural firm was rejected by the University in its bid for a 2004 building project.”) never happened.
But universities continue to make this sort of mistake, with Canada’s York the latest example. Again a university has taken umbrage at a magazine article – in this case, an article which called the campus “a hunting ground for sexual predators.”
That’s strong language, to be sure, but I suspect “literary license” covers it, and, in any case, a lawsuit costs a lot of money and will ultimately be a high-profile way of keeping the issue of campus safety in the news.
… Derek Bok’s Higher Education in America.
If you clicked on its dullsville title, you saw the cover of this hard, thick tome, done up in a style UD calls INSTANT VENERABLE.
UD has read a bit of it — she has not yet brought it home from her office because she has other big books (Ulysses, by James Augustine Aloysius Joyce, for starters) to bring home — but she can report that it is judicious, thorough, and (well, read the intro yourself) dull.
If UD had been president of Harvard, and she were writing a book about universities that she wanted a lot of people to read, she wouldn’t put sentences like this in her introduction:
Parents feel that tuitions are too high and that too little is done to hold down costs.
Parents feel… They feel… They don’t think, or believe, or argue… Even though we all know that …
Well, as I say, if I were the king of the forest… I’d write something like this:
Imagine my shock on taking the presidency of Harvard to discover that while our endowment has so many billions of dollars in it we can afford to charge zero tuition to students until the sun collapses into a white dwarf, we still charge almost everyone hundreds of thousands of dollars for a Harvard education. Since I left the school’s presidency, I’ve watched in horror as its endowment has grown to close to forty billion dollars. FORTY FUCKING BILLION DOLLARS! The moral discomfort I felt then must be as nothing to what Harvard’s current president feels as she surveys the state of the world and wonders why she and her small university have simply planted their asses on all that money.
And he ain’t even gotten to sports yet!
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Thomas Frank’s hit piece on the American university is swell (I’m still reading it), but Scathing Online Schoolmarm would caution against sentences like this one:
When the board forced the president to resign last June, they cloaked the putsch in a stinky fog of management bullshit.
Mixed metaphors are bad enough (cloaking your putsch in a fog?) but when you bring in bullshit… When you make the fog’s composition the shit of a bull… No.
Note that the sentence in my headline also mixes metaphors.
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Pointless money-drains like a vast administration, a preening president, and a quasi-professional football team should all be plugged up.
Finally he gets to football.
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Ours is the generation that stood by gawking while a handful of parasites and billionaires smashed [the American university] for their own benefit.
The problem with Frank’s cri de coeur resides in sentences like this one. Too much cri, too much coeur. Not enough compelling, rational analysis. Phrases like a handful of parasites and billionaires are a major target of George Orwell’s “Politics and the English Language.” Orwell rightly notes that in our time “political writing is bad writing.” And bad writing fails to persuade.
The University of Miami – very close to becoming (with one scandal and another) the functional equivalent of the Las Vegas Strip – is in a tizzy over whether to delete A-Rod’s name from its baseball stadium. The article quotes one observer:
In cases like these where a donor’s name has been disgraced, their reputation and the purpose behind the gift have to be reevaluated, said Rae Goldsmith, vice president of the Council for Advancement and Support of Education.
“The Enron chair of business ethics is going to send a different kind of message than the Enron chair of the arts,” Goldsmith explained.
Different from would be better, but put that aside. Is it really true that we’d be okay with the Enron chair of the arts but not the Enron chair of business ethics? Isn’t that like saying we’d be okay with the Hitler chair of poetry but not the Hitler chair of race relations? The Madoff chair of creative writing but not the Madoff chair of accounting? Franchement, I think these names have sufficient general renown to make it unlikely that even human kinetics and leisure studies would have them.
